OK, the problem can be reproduced after all.
1. Start gnome-sound-properties
2. Select "PulseAudio" for "Sound Capture".
3. Click [Test]. The testing dialog pops up.
4. Close testing dialog by clicking its [OK] button.
5. Quickly select "OSS" from drop down list.
6. Quickly click [Test].
7. Admire the untitled error dialog described above.
Underlying issue appears to be PA not having released
the device yet, and thus the device cannot be opened again.
That behaviour makes sense, but the untitled dialog
does not.

OSS just won't work, why would you expect it to? I'll make sure it doesn't appear in the GNOME prefs anymore.
As for the error dialogue without a title:
http://developer.gnome.org/projects/gup/hig/1.0/windows.html#alert-windows
"
Title Format. Alert windows have no titles, as the title would usually unnecessarily duplicate the alert's primary text. This way, users can read and respond to alerts more quickly as there is less visual noise and confounding text.
"
If it looks rubbish without a title, file a bug against Metacity, it shouldn't be poking at the title of the error message, and it should be correctly parented so we don't have that problem.